Pepsi to lay off 80 to 100, blames soda tax

With sales slumping because of the new Philadelphia sweetened beverage tax, Pepsi said Wednesday it will lay off 80 to 100 workers at three distribution plants that serve the city.

The company, which employs 423 people in the city, sent out notices Wednesday and said the layoffs would be spread over the next few months. The layoffs come in response to the beverage tax which has cut sales by 40 percent in the city, Pepsi spokesman Dave DeCecco said.

“Unfortunately, after careful consideration of the economic realities created by the recently enacted beverage tax, we have been forced to give notice that we intend to eliminate 80 to 100 positions, including frontline and supervisory roles, in Philadelphia over the next few months, beginning today,” DeCecco said.

The city lambasted the news, pointing to the company's profits.

“The soda industry sunk to a new low today," city spokeswoman Lauren Hitt said. "They are literally holding hostage the jobs of hardworking people in their battle to overturn the tax. Pepsi reported nearly $35 billion in gross income and $6 billion in profit last year, their CEO makes $25 million dollars a year, and they along with the beverage industry continue to shill out hundreds of thousands of dollars on lobbyists and advertising against the tax. The idea that they can afford to do that but 'must lay off workers' should make every Philadelphian very skeptical of whether these layoffs are actually due to the tax."

The layoffs will occur at plants in North Philadelphia, South Philadelphia, and Wilmington, Del.

The 1.5-cent per-ounce tax on sweetened beverages is levied on distributors and funds expanded pre-K opportunities for three- and four-year-olds citywide. Bottlers and supermarkets have reported that beverage sales were down significantly since the tax went into effect in January.

Canada Dry Delaware Valley said last month it would lay off 35 people due to declining sales. Jeff Brown, who owns six ShopRite stores in the city said he’s had to slash employee hours and believes as many as 300 jobs could be cut.

DeCecco said the jobs would come back if the tax — currently under appeal and awaiting an April hearing — is struck down in court.

The city has pointed to higher-than-expected revenue numbers in the first month of collection and said the industry could be exaggerating revenue decline and job losses in an attempt to prevent similar taxes in other cities or to gain a favorable outcome in court.

Minutes after news of layoffs broke, the city sent out a release announcing that its pre-K program has created about 250 jobs, through expanded teacher opportunities and support staff. In a survey completed by pre-K providers last week, directors reported 191 new teaching positions; 147 of which are full time. The average pay for the positions is $14.72 an hour.

DeCecco said there was nothing political about the layoff announcement.

“This isn't something we take lightly or want to do, and we are committed to working with our employees and the union to treat impacted individuals with the care and dignity they deserve,” he said.

Danny Grace, secretary/treasurer for Teamsters Local 830, which represents many of the employees affected, said in a statement: “Our worst fears have been realized today. ... This terrible news, although not surprising, is particularly disastrous for the members of Teamsters Local 830, who rely on a strong soda industry for their livelihoods.”

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